[Congressional Record (Bound Edition), Volume 158 (2012), Part 13]
[Senate]
[Pages 18647-18648]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       RESOLVING SPENDING ISSUES

  Mr. KERRY. Mr. President, earlier this week I supported this 
agreement to avoid unacceptable tax increases on the middle-class, and 
to at last begin to undo the damage to our fiscal standing that began 
11 years ago when President Bush signed into law unaffordable tax cuts 
for the wealthiest Americans. Make no mistake; that unfair and 
unaffordable tax policy has been the biggest driver of the fiscal mess 
and the complete ideological rigidity of congressional Republicans on 
the issue of tax policy has been the biggest obstacle to cleaning up 
that mess. That House Republicans remained intransigent even after the 
stroke of midnight on New Year's Eve just shows in very stark terms the 
dimensions of that problem.
  In contrast, the Senate acted in an overwhelmingly bipartisan way to 
make the best out of a bad situation. This, at least, sends a good 
message to the country that there's hope that Washington can function.
  But the fact that even against the ultimate drop-dead, high stakes 
deadline, so little common ground could be found itself underscores the 
dangerous situation we have found ourselves in these last years. This 
may have been the best that could have been accomplished at this late 
hour, but it was not the best we could have done for our country or our 
economy.
  We all knew from day one there was universal agreement about the need 
to protect 98 percent of American taxpayers and 97 percent of American 
small businesses from a tax increase. Now, having done that, I hope 
this removes, once and for all, the key obstacle that has stood in the 
way of our ability to seriously tackle our longterm fiscal problems.
  Nonetheless, taking into account the actions we took in this bill--
which are significant for the working families in this country--we 
still face a budget woefully out of balance that will threaten our 
Nation's future prosperity if Congress and the Administration do not 
get more serious about genuinely addressing these issues.
  This should not come as news to anyone. The message we received over 
and over from budget experts, businesses, global investors, financial 
markets and others has been loud, clear, and consistent.
  We continue to face unprecedented economic challenges, both 
domestically and globally. How we respond will determine if the United 
States can continue to claim our position of leadership in the world or 
whether we will have to cede that spot to someone else.
  Just a couple of reminders:
  Federal debt held by the public currently exceeds 70 percent of the 
Nation's gross domestic product, GDP, a percentage not seen since 1950. 
If we keep going in this direction we are looking at significant 
longterm damage to both the government's finances and the broader 
economy. The more of our resources that have to go toward higher 
interest payments, the more difficult it is to invest in our most 
urgent priorities like education, research, and

[[Page 18648]]

infrastructure to fuel growth and prosperity. The more constrained we 
are in terms of Federal dollars, the less able policymakers will be to 
respond to unexpected challenges, such as economic downturns, natural 
disasters, or financial crises and the less attractive we are as a 
place for global investment.
  Our population is changing. The aging of the baby boom generation 
presents enormous challenges--none of which can be solved in a 
political environment where one side turns tax cuts for the very 
wealthy into a holy grail of American politics.
  Finally, we must reverse the troubling trend of increased income 
inequality in this country. For too long, those at the top of the 
income scale have prospered while everyone else struggled or fell 
behind. This is not sustainable.
  These are big, important issues, not just for our Federal budget, but 
for our very quality of life.
  The decisions we make--or fail to make--in this decade on new energy 
sources, on education, infrastructure, technology, and research, all of 
which are going to produce the jobs of the future, and our decisions on 
deficits and entitlements will without doubt determine whether the 
United States will continue to lead the world or be left to follow in 
the wake of others, on the way to decline, less prosperous in our own 
land and less secure in the world.
  We tried to tackle these problems several times over the last few 
years--including on the Joint Select Committee on Deficit Reduction on 
which I served. Each time, the ideology of tax cuts for the wealthiest, 
supply side economics, and Grover Norquist tax orthodoxy got in the way 
of good policy and doomed the best possible outcomes.
  Now, staring at the edge of the so-called fiscal cliff, we had 
another chance to demonstrate to the American people and to the world, 
we are capable of focusing on the future and solving big problems. 
Unfortunately, again, while for now we may avert the fiscal cliff, this 
is another tragic missed opportunity in solving the big challenges in a 
way that is fair.
  One more time, we had the chance to prove our fiscal discipline was a 
prize well worth achieving, to make our country a safe haven for 
investment and to earn back a modicum of respect for Congress from the 
American people. In the end, this agreement does not do all of what 
voters sent us here for--we didn't make difficult and sober choices 
about taxes and spending priorities that would have restored the full 
measure of fairness and started to put America's fiscal house in order.
  The problems we confront certainly do not go away because we were 
able to cobble something together. In fact, these problems very well 
could be compounded because the more we delay the tough choices that 
are truly needed, the more severe those steps will have to be in order 
to have any impact at all.
  I am disappointed that this bill did not lay out a path or process 
for fundamental tax reform, which is desperately needed. Our individual 
tax code still is skewed in favor of the already wealthy and further 
widens the chasm between rich and poor. Our corporate tax code is not 
keeping pace and will continue to threaten the ability of U.S. 
businesses to compete and U.S. workers to prosper in a 21st century 
global economy.
  I am equally frustrated that this package did not establish the 
needed framework for how we should strengthen our entitlement programs 
by looking for reasonable ways to reduce their costs, just as we did in 
the Affordable Care Act. It is critical we start taking real steps now 
to protect these programs in ways that are fair and which guarantee 
that we keep the promises we made to seniors when they were created.
  I'm relieved that the agreement averts a 27 percent cut in Medicare 
physician payments for 2013 so that seniors will continue to have 
access to their doctors. But a one-year fix falls far short of a 
permanent solution, which I have long supported.
  Every Medicare expert knows that Medicare's Sustainable Growth Rate 
(SGR) formula is irreparably flawed and needs to be repealed. I 
continue to believe that Congress should permanently repeal the SGR and 
offset the cost with savings from capping a portion of the spending for 
Overseas Contingency Operations, OCO, below amounts in the 
Congressional Budget Office, CBO, baseline.
  This latest Medicare physician payment fix comes at a great cost to 
the health care industry in Massachusetts including our hospitals, 
dialysis providers and manufacturers, Medicare Advantage plans, and 
medical imaging manufacturers and world-class physicians who rely on 
this life-saving equipment.
  For example, the agreement offsets the cost of SGR fix with about $15 
billion in hospital cuts including: $10.5 billion in coding 
adjustments, $4.2 billion in Medicaid Disproportionate Share Hospital, 
DSH, payments, and $300 million from reducing payments for stereotactic 
radiosurgery services. I am concerned that continued cuts to our 
hospitals will ultimately jeopardize beneficiaries' ability to access 
care.
  The agreement also lowers Medicare reimbursement for medical imaging 
by $800 million, leading doctors to hold on to their old equipment 
longer and preventing patients from accessing the newest technologies 
that are better at finding early-stage diseases. I have long opposed 
this policy which is particularly difficult for Massachusetts because 
we have thousands of jobs directly tied to medical imaging technology.
  Additionally, I'm particularly concerned that Medicare payment 
reductions for dialysis services could undermine kidney care at 
dialysis treatment centers across the state as providers are adjusting 
to a new Medicare payment system.
  This package also fails to resolve potential problems with the 
looming cuts of sequestration because it does not include more 
deliberate spending decisions. We have only avoided sequestration 
temporarily. I hope the Senate will consider legislation to reduce 
wasteful and unnecessary federal spending as soon as possible. There is 
room to make appropriate changes in federal spending.
  But let us be clear that there's a big difference between wasteful 
spending and necessary investment. Cutting critical areas of public 
investment, like education, transportation, and scientific research is 
precisely the wrong way to promote long-term economic growth and is in 
fact counterproductive to longterm deficit reduction because it's the 
enemy of growth which produces revenue. As we look at the next round of 
budget discussions, we must ensure that these long-term investments are 
expanded and not indiscriminately hit by short-term across the board 
spending cuts. There are better ways to spend our scarce Federal 
dollars, and we all should be willing to have those honest 
conversations.
  Finally, I am particularly concerned that we may again see our 
Nation's credit rating used for political leverage when we return to 
the unfinished business of how to fund the Federal government for the 
next fiscal year or two.
  Despite how it looked from the outside, the process of getting us to 
agree on a package of tax cuts and delays in spending reductions was 
the easy part. The most difficult issues remain. Our Nation needs 100 
Senators and 435 Representatives who face the facts and find a way to 
work not just on their side, but side by side.
  We still have a lot of work to do to resolve our differences and face 
our Federal spending issues.

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